Both 15-year fixed and 30-year fixed refinances saw their mean rates rise over the last seven days. The average rate on 10-year fixed refinance also inched up.
Like mortgage rates, refinance rates fluctuate on a daily basis. With inflation at a 40-year high, the Federal Reserve has hiked the federal funds rate six times in 2022 to try to cool the economy. Though mortgage rates are not set by the central bank, its rate hikes increase the cost of borrowing money and eventually impact mortgage and refinance rates and the broader housing market. Whether refinance rates will continue to rise or fall will depend largely on how things play out with inflation. If inflation cools, rates will likely follow suit. But if inflation remains high, we could see refinance rates maintain their upward trajectory.
If rates for a refi are currently lower than your existing mortgage rate, you could save money by locking in a rate now. As always, consider your goals and circumstances, and compare rates and fees to find a mortgage lender who can meet your needs.
30-year fixed-rate refinance
For 30-year fixed refinances, the average rate is currently at 7.35%, an increase of 25 basis points compared to one week ago. (A basis point is equivalent to 0.01%.) Refinancing to a 30-year fixed loan from a shorter loan term can lower your monthly payments. Because of this, a 30-year refinance can be a good idea if you’re having trouble making your monthly payments. However, interest rates for a 30-year refinance will typically be higher than rates for a 10- or 15-year refinance. It’ll also take you longer to pay off your loan.
15-year fixed-rate refinance
The current average interest rate for 15-year refinances is 6.52%, an increase of 13 basis points compared to one week ago. A 15-year fixed refinance will most likely raise your monthly payment compared to a 30-year loan. But you’ll save more money over time, because you’re paying off your loan quicker. Interest rates for a 15-year refinance also tend to be lower than that of a 30-year refinance, so you’ll save even more in the long run.
10-year fixed-rate refinance
The current average interest rate for a 10-year refinance is 6.75%, an increase of 26 basis points from what we saw the previous week. You’ll pay more every month with a 10-year fixed refinance compared to a 15- or 30-year refinance — but you’ll also have a lower interest rate. A 10-year refinance can help you pay off your house much quicker and save on interest. Just be sure to carefully consider your budget and current financial situation to make sure that you can afford a higher monthly payment.
Where rates are headed
At the start of the pandemic, refinance rates dropped to historic lows, but they have been steadily climbing since the beginning of 2022. The Fed recently raised interest rates by another 0.75 percentage points and is poised to raise rates again to slow the economy. Though it’s unclear exactly what will happen next, if inflation continues to rise, rates are likely to climb. If inflation eases, rates could level off and begin to decline.
We track refinance rate trends using data collected by Bankrate, which is owned by CNET’s parent company. Here’s a table with the average refinance rates reported by lenders across the US:
Average refinance interest rates
|Product||Rate||A week ago||Change|
|30-year fixed refi||7.35%||7.10%||+0.25|
|15-year fixed refi||6.52%||6.39%||+0.13|
|10-year fixed refi||6.75%||6.49%||+0.26|
Rates as of Nov. 4, 2022.
How to find personalized refinance rates
It’s important to understand that the rates advertised online may not apply to you. Your interest rate will be influenced by market conditions as well as your credit history and application.
Having a high credit score, a low credit utilization ratio and a history of consistent and on-time payments will generally help you get the best interest rates. You can get a good feel for average interest rates online, but make sure to speak with a mortgage professional in order to see the specific rates you qualify for. To get the best refinance rates, you’ll first want to make your application as strong as possible. The best way to improve your credit ratings is to get your finances in order, use credit responsibly and monitor your credit regularly. Don’t forget to speak with multiple lenders and shop around.
Refinancing can be a great move if you get a good rate or can pay off your loan sooner — but consider carefully whether it’s the right choice for you at the moment.
Is now a good time to refinance?
Generally, it’s a good idea to refinance if you can get a lower interest rate than that your current interest rate, or if you need to change your loan term. When deciding whether to refinance, be sure to take into account other factors besides market interest rates, including how long you plan to stay in your current home, the length of your loan term and the amount of your monthly payment. And don’t forget about fees and closing costs, which can add up.
As interest rates have steadily increased since the beginning of the year, the pool of refinancing applicants has shrunk significantly. If you bought your house when interest rates were lower than current rates, you may likely not gain any financial benefit from refinancing your mortgage.